Marcia Sprewitt opens with a pledge to focus upon sustainability, and to make no apologies for doing so, for our schools, and for NAIS itself. And on that basis, she speaks of the controversy with ISM regarding financial aid processing and the competition between the two outfits, and defends the NAIS position against the ISM protests that ISM should be able to advertise via NAIS channels its SSS competing product.
Membership report: NAIS now has 1399 members, a slight increase from 1385 a year ago; “NAIS is retaining 99% of its membership, which speaks to our value proposition.” More membership growth is anticipated.
Treasurer’s report: We have continued to increase the value of membership schools, with operating surplus at end of 08-09 year, of $600K. Less than 33% derives from membership dues: a great tribute to NAIS staff. Balance from conferences, workshops, products and services: Keep Buying!
NAIS’s new SSS (School and Scholarship Services) CEO speaks to difficulties with SSS this year, and apologizes for them: the problems with the rollout fall into a general category of everything being new– all at once. Two new platforms, a new call system, and a new document processing service, and a new CEO: a lot of change, and hence, a lot of issues.
“Asking for your patience without offering strong evidence that we are correcting things does strain your credulity, I realize,” he says. “We do have solutions for all the problems we see: we just need time. We are absolutely committed to the success of this product. There are over 100 people working on the SSS project; there is a tremendous amount of potential in the new system. We realize we have overpromised and underdelivered: our promise that we can process documents in 3 days has been impossible to meet, and it is more like six days. In February alone, we will process and digitize 160,000 documents.
“We are also having issues with our call center: they have been overworked and understaffed, and we are experiencing attrition issues. But we have added staff, working on retention, and adding overtime.” A sincere pledge from a guy clearly in difficult position.
Pat steps up next: He is using clicker and cell phones to do a pre-quiz to test the “wisdom of the crowd: ”
Question 1: What is the average number of years of head tenure in current school? 57% vote that it is 6-10 years.
Q. 2: Average percent change in school enrollment from 08-09 to 09-10? 40% vote that it is down 1-5%
Pat’s Signs of the Apocalypse:
Managing this year has felt for many like playing chess with the grim reaper; Pat draws upon the seven signs of the apocalypse. What are our 7 seals? Pat’s signs of the imminent
- Hell has frozen over: DC is in a deep freeze.
- The “safe” barriers and boundaries seem to be disappearing. “young/old, work/home, public/private, teacher/student, real/virtual: these boundaries are vanishing, these demarcations are no longer clear.”
- The rich are not getting richer: and this is a problem for high tuition private schools: we depend on the strength of the most affluent 5% of the population, and this group is not trending upwards for the first time in a long time.
- Americans have started saving instead of spending: this is good in the long run, but in the short run, we need people to spend to put into the economy.
- Family members are behaving strangely.
- Men are happy and women unhappy. For our schools, it is a problem because our workforce in schools is 70% female.
- Boomers are not retiring to play golf everyday.
Signs of Industry Challenges : The VUCA world of disruptions: volatility, uncertainty, complexity, ambiguity.
- Disruptive economics, and the new normal.
- Disruptive demographics, puzzling diversity.
- Disruptive technologies– competing visions of schools of the future.
Pat directs us to Moody’s adversity index: In December 09, there are 20 states in recovery, but 30 are in still very much in recession. 60% of schools lost students in the past year, and the trend line is growing; a greater proportion of schools are losing students.
Median one year percent change in enrollment: 4%.
Increase in percent change in financial aid dollars: 15%
This represents that our schools are having a first ever sale– that we are discounting tuition for need-basis. Pat says that having a sale in this context is a good thing.
The Value Proposition: Perceived outcomes divided by perceived price equals the value proposition. Pat pleads with the audience of heads and schools to take the value proposition seriously: we MUST enhance our perceived outcomes while holding steady our perceived price.
Pat urges schools to Choose how to Compete: On Brand (market prestige), or On Product (uniqueness), or on On Price (lower)? The default, and Pat says, prefererposition is to compete on product– that your school is SO unique, so exceptional and different, that you can charge what you charge and people will be happy to pay for what they truly cannot get elsewhere. Pat says bluntly that he fears that we have not done enough hard work to make our product truly exceptional. What is your unique product at your school?
2nd disruption: Demographics: What is the plan to replace the declining numbers in the traditional affluent family base? How many kids are in the pool who CAN pay for our schools? And then, how many of them are you getting? 15% of all families choose private (all kinds of private); 25% of families over $150,000 pay for private school.
The traditional market: white affluent kids- is declining. Hispanic kids: they are growing, but what are our schools doing to be more welcoming to Hispanic kids and families?
Another demographic issue: will the boomers EVER retire? They are not retiring at the rate we anticipated. A leadership survey in 2009, repeating the 2002, showed that heads are still getting older on average, that they are postponing retirement, and there is little progress in diversifying the headship in gender and race. No change in gender: still 70% of heads are male; some small progress, 5%, in racial diversity of heads.
But about that average head tenure, there is good news. It is not 6-10 years, as the majority selected at the opening poll, but, Pat says, a full 13 years! Pat’s very important takeaway: there is an entirely distorting misconception in the industry that there is a high turnover of heads and short average tenures; some consultants say it is under five years. But no! It is 13 years!
Pat also speaks to the demographic crisis posed to our teaching prospects: it is not good. The pool of teachers traditionally and nationally has largely come from the lowest performing sector of college students, but we need in NAIS must continue (!) to hire from the elites. Pat urges us to hire from Teach for America, which has the cream of college graduates, the future leaders.
Then there is the technologicaly challenge posted by the data reported in Disrupting Class: more and more learning is happening online, and there is a huge trend toward online schooling that may dramatically and traumatically disrupt all forms of traditional schools.
Pat offer a great Shoutout for Khanacademy.org: an excellent resource for teachers, many. many 6-7 minutes videos that are very powerful explanations of difficult to understand concepts in math and other areas.
This technological disruption must be confronted; Pat reports he will speak more to this Friday with one of the co-authors of Disrupting Class.
Returning to Finance, Pat urges us to look at new financial planning models. One example is the new Middlebury Model: A committment to CPI plus one for tuition increases. Pat reports that many Heads on the NAIS board report aligning with this same pledge: CPI plus one. (At St. Gregory, we froze tuition this year, and with CPI at roughly negative one, this is itself in alignment.) Drew School offered a fixed price menu for four years: coming in as a freshman provides you a promise to a fixed four year tuition.
Finally, Pat, running out of time and speaking somewhat hurriedly, reviewed what he described as the NAIS Top 10 strategies (but, confusingly, only 3 are presented). Did he mean top 3, or did seven get dropped?
Top 3 NAIS strategic priorities:
- Re-engineer electronic delivery of information and research: pushing this information out to members, not waiting for schools to come find it on the website. This is the NAIS hedgehog, this where it can be most helpful, but are going to work harder to push this information to us in ways we can really use.
- Seek out and adopt a new advocacy theme to help independent schools tell their story, by investing in market research and seeking a compelling message for marketing and enrollment growth.
- Engage the independent school community in a wider conversation on financial aid strategies-make us more effective at financial aid administration for enrolment and strong financial futures.
Pat closes with a call for another, alternate VUCA (alternate to volatility, uncertainty, complexity, and ambiguity). He calls for, from us the Heads of School and for NAIS itself, a VUCA leadership marked by vision, understanding, courage and agility.